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Suppose that the production function for output in an economy is given by=0.750.25The number of workers, N, is fixed. The saving rate is s ,
Suppose that the production function for output in an economy is given by=0.750.25The number of workers,N,is fixed. The saving rate iss, and the depreciation rate of physical capital is.
Show the equation physical capital stock over time. Explain in words what happens to this equation in the long run steady state equilibrium.
Derive the steady state levels of capital per worker and output per worker in terms of the saving rate (s) and the depreciation rate ()
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